ceiling all the way through 2013, spring of 2013, approximately $2.8 trillion. there would be $1 trillion of spending cuts up front. there would be then a special committee that would have to find another $1.8 trillion in cuts. now this special committee could tackle tax reform, could tackle entitlement reform, but then they may not. if they can't come to an agreement, there would be a so-called trigger, and this would mean an enforcement mechanism forcing across the board cuts in the federal government that would tackle both medicare and the pentagon. that had been of course the sticking point for the last three weeks. i'm joined by the moderator of "meet the press," nbc's david gregory. look, your show was all over this this morning. david plouffe said no deal yet. but, it does feel like we're sort of surrounding it. >> well, and it's, as we've been talking about there morning, will depend on how this compromise is framed.

if you go back and look at what the house did, you had a two-stage process, it was short a term in terms of what boehner agreed to but the balanced budget amendment was that same sort of trigger. in other words, it forces cuts. here in this deal you may get more cuts and then you get the mechanism in place to force congress' hand down the road. this is the key to getting house republicans to come on board and to actually vote. so what's happening right now according to people i am talking to, you've got the same kind of work going on -- what will the house support, what's the threshold in the house, how many votes can boehner lose and still support this thing. >> it does look like it is going to take more republicans to get this through than democrats. have you one of these freshman security guys, sort of tea party, sort of not, here's what he said. >> if your speaker supports the compromise that they're negotiating today, will you vote

yes for it? >> i have to look at it. i'm not sure. >> but what has to be in it to get you to yes? >> for me the balanced budget amendment is really important but i think there's enough members of the house that will probably support it so it can pass. i think the votes are there. >> votes are there in the house. that's important. >> i think the votes are there for it. the majority of the house already voted for this similar plan. >> david, this has been the fine line they've been walking. the white house says every time they tinker with it a little bit to get republicans on board they might lose democrats. there hasn't been a lot of give on either side. it does seem the white house made the decision we're going to lean slightly to try to fine more republicans votes than democrat votes. >> first, one key sticking point is what forces congress' hands that a lever the democrats have, that is an automatic cut in defense spending. they hope we'll make sure that republicans come to the table

and cut spending. but look, i asked david plouffe this morning, there's no tax increases in this. he talked about, well, down the line to get that second stage you're going to have tax reform and you're going to have entitlement reform, but as you pointed out, that may not be in there so they are punting on some really big hard decisions, entitlement cuts and social security and medicare, the president is not specifying what he would absorb with there, nor is clair mccaskill, as well as this tax question. labrador as a house republican was worried about that second stage somewhere out there you come back to the same debate with this special committee trying to get tax increases through. >> the irony is there's another trigger out there -- that is the bush tax cuts, those rates expire at the end of 2012. what happens there? is that a trigger that's going to get tax reform an force this special committee to do it? >> tax reform is a smart idea. i mean it's smart in the political sense in that there's actually a fair amount of

support for doing it. and they were getting close when the president and boehner were discussing the larger deal and it got caught up in some rates. but i think the notion, even among progressives that everybody has some skin in the game might be important. >> i'm going to sopo to the sen floor. harry reid has taken to the floor and i think he's going to give us an update. >> they wondered how they'd take care of their families if the checks stop coming next month. let me read a little bit of that. it came out yesterday. "half a world away from the capitol, the capitol hill deadlock, the debt crisis is weighing heavily on troops in afghanistan and the top question on their minds saturday, even as bombing rocked the city around th them, a question they couldn't answer -- will we get paid?" admiral mullen went on to say, i don't know the answer to that

question. but either way those soldiers, he said, all of you must continue to work every day. mr. president, this is really unacceptable. a country as rich and powerful as ours, men and women with bombs going on around them, shouldn't worry whether this country will leave them high and dry. this afternoon i asked those who have said they will never compromise on any terms to think about who their spub borness will really hurt. seniors, soldiers and others. i've spoken to the vice president this morning, in fact a couple of times. he's hopeful. of course we have to be hopeful and we're close to an agreement with republican leaders. the framework of this agreement is based on new ideas and old ideas. after speaking to republican leader mitch mcconnell this morning, we are cautiously optimistic. there are a number of issues yet to be resolved. and we must understand them. there's no agreement that has

been made but we're optimistic that one can be reached but we're not there yet. optimism in days past has been really stomped on at various times. these major issues still to be resolved are these ongoing discussions. they're something we have to resolve in the next few hours if they're going to be resolved. each of them must be resolved before we have a final agreement and as we know, one problem can stop the whole agreement from going forward. but we want to see something done as quickly as possible and believe all sides of aware of this urgency. it is unfortunate that house of representatives wasted all last week on legislation they knew would never pass the senate and in fact. barely passed the house. not a single democratic vote. democrats have said all along we'd never agree to a short-term agreement that would be

revisited in a few short weeks. we have to move on. t august, september, october, november and december. five months. we would be back in this same debate in a matter of weeks. we could not allow that to happen so any agreement has to have a long-term approach. this is absolutely necessary. we must give financial markets confidence. this country won't shirk its obligations now or in the future. i know that the compromise being discussed at the white house -- again, gets us past january 2013. that has to be done, and that will be done if an agreement is reached. it is also crucial the agreement

being crafted set us on a path to fiscal restraint. there's still elements to be resolved and we're watching them very closely. it must include thoughtful constraints on spending, 12-member commission to recommend additional deficit reduction measures this year will be a key to that effort and i say to my friend, the republican leader, i appreciate his wrapping his arms around this and being such a cheerleader for this idea. it is a good idea, and idea that congress itself has solved the problem. it would be a joint committee that would move forward and there would be a trigger that if they didn't resolve this and something else would happen. based on past experiences i think it would be tremendous incentive not to let that happen when the trigger kicked in.

the joint committee, there are no constraints. they can look at any program we have in government. any program. any that has the ability to -- they have the ability to look at everything and that's what needs to be done. the commission will ensure we undertake that responsibility. when i thought of this idea about the commission i knew it was important that it achieve real results. and it will be essential will choose members with all their minds willing to consider every option even when the options are a tough spill to swallow for both parties. so mr. president, cooperation is the only way forward. compromise is the only way forward. this is what andre carnegie said about the virtue of compromise, "i shall argue that strong men --" and since the senate's changed so dramatically -- "and strong women --" that's me, i

stuck that in. "i shall argue that strong men know when to compromise and that all principles can be compromised to serve a greater principle. andrew carnegie. but perhaps president abraham lincoln said it best when he said this -- and i quote -- determine that the thing can and shall be done and then we shall find a way. that's where we are today, mr. president. we must determine that a thing can and shall be done and then we need to find that way. that's president abraham lincoln. would the chair announce the business for the day? >> under the previous order, the leader time time is reserved. under the previous order -- >> david gregory, we heard harry reid start to make the case for the deal, make the democratic case for the deal, talk about the things he feels like he got out of this, not talking about the issue of revenue, not talking about the things that they didn't get out of it. >> right. well, if you're watching all of this from outside washington, you still have to be shaking

your head. there is a political problem that may in fact be about to be solved and that's very important. and the short-term financial problem facing default. but the underlying fiscal problem in washington, the reason why the debt is so out of control and the deficit continues to grow is something that now a bipartisan commission is going to look at, 17 months after the president appointed a bipartisan commission to look at these hard things, the reality is that washington, members of congress and administration don't they want to make the very hard choices in order to get the deficit under control. that's still where we are right now even if we can pass this up. >> to be a true cynic here, it does feel as if they cut a deal to preserve their 2012 talking points so the democrats can sit there and say these guys are going to cut medicare and social security and republicans say all they want to do is raise taxes and because they're not going to touch either one of them, both sides -- could arguably get to keep their talking points. >> the question becomes when is

there enough space to make the hard decisions? is it 2013, then all of a sudden you put entitlements -- >> what if it is a first-term president? who's always looking for re-election? >> so it only makes the cynics sort of dig in. you already see the battle lines here in terms of how democrats will describe tea party folk and all the others. we have not solved some of those fundamental problems but the here and now -- and i do think it is worth pointing out that people who are watching this this morning, be them american investors or big-time investors around the world who hold our debt, are looking at this very carefully. banks in the united states and around the world are all hands on deck today because when asian markets open if they don't have enough confidence that they've reached this deal you could actually see some kind of market shock tomorrow. >> it's funny you bring up the asian markets because i remember last sunday, that was the goal of when they were trying to reach a deal by 4:00 eastern time because that's asian markets.

i'm hearing the same thing today, particularly from the republican side. we definitely want to try to seal this by then. white house was hoping to get it done before 1:00. it looks like we're somewhere in the window between 1:00 and 4:00 we'll hear them. >> but now you have the real deadline. last week we were getting closer to the deadline. now the deadline is actually here. as a top anchor described to me at the end of the week, this is a confidence game. so there are weak links in the system and those weak links can be exploited if things go wrong. >> the other part of "meet the press" today that was so compelling was the collateral damage the political system has taken over this. sometimes we overestimate, but is this a waist where the political parties may be underestimating it? >> i have to think, yeah. i mean i don't see -- david plouffe said that this has been a helpful debate for the country. i don't see anybody describing it as a helpful debate for the country. it is not a healthy debate, it

is not a helpful debate. it is destructive. it is a failure to govern is what it is. the government failed to agree up until the last moment to avert a government collapse and they finally did. and now you have a potential default which looks like we'll avert here but only until we get to the edge of the cliff. this is not government at work. we're only governing one crisis at a time. t.a.r.p. is an important example. in september 2009 the t.a.r.p. vote goes down, the bank bailout bill. >> 2008. >> yeah, 2008. but that bill originally goes down and the dow falls precipitously, almost 700 points. then they right it, they pass it but the dow still loses territory. so the broader audience here is huge for lawmakers on capitol hill and for the president. >> david gregory, moderator of "meet the press." what a day and it may not be over. >> we'll be watching. >> thanks for your help. when we come back we'll go to capitol hill because one thing we didn't hear from harry reid was -- is the vote at 1:00

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increased by $800 well, the u.s. senate is now officially in session. they kick off at noon today. harry reid, the senate majority leader, took to the floor to update everybody on the state of the debt ceiling negotiations. he said they're getting close. he started to make the case for why the deal that apparently is being close to being worked out between republicans and the white house is a good deal, is worth doing. he talked about the questions that admiral mike mullen got while visiting afghanistan from soldiers wondering if they're going to get paid on time and

using that as a compelling reason of why they have to get this deal done today. what we don't know is if the 1:00 vote for senator harry reid's original plan that he'd been working on yesterday is still going to go up. they have not yet made that decision. harry reid has not yet announced what the future of that vote is at this point, so let's bring in nbc's luke russert on capitol hill and mike viqueira at the white house. luke, let me start where you are. that's where the action is. what's going on up there, what are you hearing, this 1:00 vote, still up in the air. is harry reid sort of using it as that last bit of leverage that he might have? >> perhaps, chuck. but for all the optimism we've heard about a possible deal struck between republican leaders and the white house, it would seem odd that harry reid would still try and have a vote on his plan of which 43 republican senators had already said no to. we talked about his strategy yesterday trying to pick off

some republicans to come on board to get the 60. but if they are in the midst of a grand compromise, it is hard to see why he'd do that. as of now it is unclear. what i can tell you though is that sort of opinions are now starting to trickle in about this possible compromise and for all intents and purposes, mitch mcconnell can deliver senate republicans, reid will deliver the senate democrats, they'll get through the senate. i sincerely believe the question now becomes whether this can get the 216 votes in the house of representatives. so far talking to progressives and tea party folks, i spoke to a progressive aide who says our guys are sufficiently spooked by this. the president went way too far to the right. he's allowing way too much in cuts with no revenues. i spoke with some tea party guys who said i don't think i'm going to support the boehner bill but

still it is not enough. i think if this plays out and from discussions i've had, okay, here's the optimism for this deal. the senate already struck a grand bargain, the smart guys in the room, there is still a long way to go in the house. it is on the whipses. >> mike viqueira, the former mayor of the capitol hill press corps, now with me there at the white house. this has been a fine line that the white house and democrats have been walking here. every time they move somewhere to reassure enough republicans, then they hear about it from harry reid and nancy pelosi, you're going to lose more democrats. so the question is, have they found a sweet spot here that they've decided, we're going to go two-thirds republican, one-third democrats to get this through the house? >> right. it's like this alchemy, you give

a little here, you lose a little there and visa versa. they try to balance the scales. they really are walking this incredibly fine line. one distinction that you have to make here, between taxes and revenues, republicans insist that they're not going to be raising taxes at all as any part of this agreement. meanwhile democrats are talking about revenues. one thing to remember during the course of this debate -- sounds like semantics but it is very real. when republicans talk about revenues they talk about whatever money that's coming in to the country, an increase in money as a result of what they really want to do is overhaul the tax code, flatten it, get rid of some of the loopholes, simplify it. but as far as raising taxes are concerned, they're simply not down with that. the issue comes up about the bush tax cuts, the deal the president struck in december with mitch mcconnell, much like the deal he's striking now with mitch mcconnell. you heard harry reid say the deal is being negotiated at the

white house. if the democrats have to vote on cuts to entitlement programs, you and david were talking about this -- they're already on the record as opposing any sort of dramatic change to medicare and social security. when they voted against that ryan plan, which would have been a dramatic overhaul of the medicare program. even though the president, the top democrat in our country, has already put it on the table publicly talking about reduced cost of living adjustments and social security in the run up to this and reduction in medicare benefits, possibly raising retirement age and some other adjustments to strengthen those programs, they're already on record against that in voting against the ryan plan. you take away all their cover if this is what comes out of this super committee, especially if it is due to the fact that republicans are unwilling to raise taxes. those bush tax cuts, this does not touch them. correct me if i'm wrong, chief white house correspondent, but as far as i know this does not touch them, it leaves them alone. they're set to expire two years from december 2012 and i think

when and if we see the president today i think he's going to emphasize that point certainly to help mollify his base. >> that is the ultimate trigger when it comes to trying to get these guys to do tax reform. for both of you because i want you to quickly read an update in your e-mail we got, while you do that, luke russert, let's go to what harry reid said on the floor just a few minutes ago about this deal. >> i know that the compromise being discussed at the white house adopts the senate's long-term approach which will give the economy the certainty it needs. take us past the year -- past january 2013. that has to be done. and that will be done if an agreement is reached. >> luke res certificatussert, w update. >> this is from our wonderful senate producer. she said yes in fact the senate will take the 1:00 vote. they're reading knowledge that

it may go down but this will still be the vehicle that sends it to the house. they'll swap out the replan for the new plan. essentially that's a little bit of parliamentary procedure. harry reid will knowingly see this go down because it has the house language attached to it, they can put in whatever the compromise is and expedite the process back over to the house of representatives. parliamentary procedure. it really helps in terms of what we know has been the biggest enemy through all this, and that is the ticking clock. one point vick was talking about how democrats have a lot of consternation about just what this deal might be. i spoke to one before i came here. one-half to one-third of the u.s. government, house republicans essentially, really set the parameters of this debate. the president, democrats, were playing on their field. and a lot of progressives i've spoken to said it is unbelievable that we let them

just roll us over on this. that's why i'm very interested to see what direction nancy pelosi goes on this compromise that's supposedly coming. >> mike viqueira, i want to quickly ask you about this clock issue when it goes to the house. so the decision is made to go through -- go forward with it. they swap in the house. they swap in the new deal at some point. that should mean they can vote on this some time tomorrow and get it to the house maybe tomorrow evening. is that what it sounds like to you? >> i want some clarification on this, chuck. because there are a lot of wrinkles in what happens here. they might be assured they can get some sort of unanimous consent agreement. i think that's what it is going to take. if they can do that, that would be remarkable in and of itself. obviously that deadline rushing up now, tuesday at midnight. >> mike viqueira, luke russert. thank you both. up next -- i've got ohio congressman tim ryan. he'll join me next and the senate set to vote at 1:00

eastern. stay with us for live coverage right here on msnbc. my grandfather was born in this village. [ automated voice speaks foreign language ] [ male announcer ] in here, everyone speaks the same language. ♪ in here, forklifts drive themselves. no, he doesn't have it. yeah, we'll look on that. [ male announcer ] in here, friends leave you messages written in the air. that's it right there. [ male announcer ] it's the at&t network. and what's possible in here is almost impossible to say. oh, just booked a summer vaycay. ooo. sounds pricey? nah, with the hotels.com summer sale, you can find awesome deals for places nearby. interesting... wow, i'm blown away. you look great. hotels.com summer sale, save up to 30%. and get a free kindle. hotels.com. be smart. book smart.

there are still elements to be resolved and we're watching them very closely. this must include thoughtful constraints on spending, we know that, 12-member commission i conceived to recommend additional deficit reduction measures this year will be a key to that effort and i say to my friend, the republican leader, i appreciate his wrapping his arms around this and being such a cheerleader for this idea. >> we could be about 30 minutes away from hearing if a compromise has definitely been reached between republicans and the white house and senate democratic leadership. and for more on the possible compromise that's taken shape, i'm joined by democratic congressman from ohio tim ryan. he serves on the committee on appropriations but nobody probably has more main street -- we talk about wall street a lot but nobody probably has more

main streets in their districts than you, congressman ryan, youngstown, ohio, 17 congressional districts. when people say working class congressional district, i think of yours. what do you thing of what you have read about this deal? i know that right now for a lot of you folks in the house, you've only read about it. >> yeah. we're getting the details as you guys are delivering them right now because we're not in session. we're in a pro forma session. but this again looks too unbalanced. here we have -- they're saying $3 trillion worth of cuts, absolutely no revenues. so the fellow in youngstown who's had stagnant wages for 30 years while the top 1% has seen huge growths in their income is sitting here going, wait a minute, i'm going to take a hit on my pell grants, on head start and all these domestic spending programs, meanwhile the top 1% is not asked to make any sacrifice at all. for those of you who do represent these working class districts, this just seems way out of whack. >> congressman, one of the

arguments that democrats are making for why this deal -- you got to get it through. you've heard the president say this, particularly to progressives. he says if you care about government investment and things like education and infrastructure, you got to participate in the fiscal -- in dealing with this fiscal crisis and at the same time, then you go back to live another day essentially politically is what he's saying to go and fight for the things you want to fight for that government does. what do you make of that argument that he makes? >> well, we all understand that complete economic collapse would hurt people in youngstown and all over the country. it would further damage this tepid recovery that we're having in the first place. so we understand that argument and we've tried to do the mature thing. i actually voted for the reid bill yesterday when it was on the house, begrudgingly voted for it. but in the end of the day a lot of us would like the see the president, months and months ago, even when we were dealing

with the tax issues, we have to make the demand that the welt yes, sir in this country sacrifice. they're not being asked to sacrifice anything, chuck. we've got soldiers at war, two wars going on, a bad economy, 20% unxloiemployment in the construction strayed atrade and asking the wealthiest in this country to make a trade. we need revenues to make these investments. if you want to appease the bo bondholders down the line, let's ask the wealthiest to contribute. putting the brunt of the cuts on main street while the top 1% get off scot-free, quite frankly for a problem that main street did not create, i think is completely unfair. i get the argument. we're all at the end of the day going to have to do the mature thing, but it really is frustrating. >> do you feel as if the white house cut a bad deal, didn't fight hard enough or do you feel that they were stuck? >> i think we lost this debate

months ago when we were talking about revenues but quite frankly, a lot of us were thinking if there's not revenues, there's nothing to talk about because this is what's going to happen. i'm for him using the 14th amendment, if necessary. that way there would be no cuts. then we could have an honest discussion about this. so i think, quite frankly, we lost this deal months ago in the framing of the whole deal. look what we're putting in place and we don't know when these cuts are going to come. are they going to come in the short term an that's going to further damage the recovery that we're having right now? cuts right now, government spending is a disaster so we don't know when these trillion dollar cuts are even going to come so there is a lot of details yet to be seen. >> congressman tim ryan, democrat from ohio, 17-district youngstown, ohio, lots of main streets there. congressman, thanks for coming on. after weeks of bitter negotiations, the glimmer of hope that congress is nearing the compromise to raise the debt

ceiling. we'll see. are democrats giving up too much? you just heard an argument that some democrats believe that. will republicans ever give on taxes? stay with us, you're watching a special addition of msnbc sunday programming. because we're the place for politics. and replace your old o with the full flavor of kraft mayo with olive oil. ♪ made with half the fat and calories of hellmann's real mayo... ...kraft mayo with olive oil is the new standard in mayo.

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♪ ♪ now to the latest news out of washington and this ongoing debt debate. will we see the compromise announced in minutes? the senate is back in session and as it heads for that 1:00 p.m. test vote on harry reid's plan to solve the impending debt crisis and why that's likely not to pass, senate minority leader mitch mcconnell says the two sides are getting close to a deal on another plan. >> we're still working on the parameters of it, we're being very close to recommend -- i am, to my members, that this is something they ought to be able to support. >> the president's senior advisor david plouffe was david gregory's guest on "meet the press" and he said time was

running out for congress to compromise. >> in the coming hours, we're literally talking about in the coming hours, think it's incumbent on congressional leaders to compromise that last bit. >> well, everybody's trying to figure out who's won and who's lost. joining me now live, karen finney and robert traynam, hoef the "roroll call tv. >> this is the first time that republicans and democrats have been talking about guts in a very substantive way. the white house unfortunately has been very much on the defense ever since this conversation began about six months ago. you take a look at that, republicans have won. unfortunately, a lot of tea party folks out there i've spoken to don't think they have won. the losers we'll get to in a second because there's been a lot of losers. >> it's just let's look at the raw politics.

republicans and john boehner's house basically snatched defeat from victory last week and so all of a sudden it is the president that cuts the final deal, it is the president that gets to play the adult in the room, it is the president with the help of the u.s. senate that gets to shepherd this through. i've heard some frustration for republicans, oh, geez, we won in all the substance but he gets to take the credit and look good to his swing voters. >> i don't know if that's going to be true because it may end up being that speaker boehner and his folks do come out on top because, we're having a conversation about some kind of compromise that's all cut and there's no revenue as far as we know and that's essentially what the republicans wanted. i agree with robert, some are going to say that's not enough but i think the great frustration on the part of democrats has been that this whole conversation has been had on republicans' turf. even though yes, it seemed like we had a couple of points actually where it seemed like obama got the upper hand over boehner, yesterday's little

back-and-forth with mcconnell and reid and biden and obama kind of called that back into question in terms of who's really driving this process. >> first of all, one of the things we're hearing, both you and i were just hearing similar things at this point, as far as democrats are concerned, the guys that i think count votes particularly in the house, the sooner they have the vote the better because they worry that the more this details come out, they think there is going to be a bunch of activists on the progressive wing of the party that are just going to say this deal stinks. >> that's absolutely right. it is not just those guys though. it is the more these members get to talk to each other and sort of coalesce together and say we're going to form a block that's not going to vote for this, the harder it is going to be to get through. >> the lesson on the republican side here is they really don't have a lot of -- the tea party has given them a message and given them their ability -- the republican party's ability to argue for spending cuts and argue for size of government in

a way they'd lost for a decade thanks to president bush in many ways. but they can't be tamed essentially and it makes them harder to -- so here they -- won a policy fight but lost the rhetorical fight. they look like the folks that americans are saying, whoa, whoa. maybe they like some of their message but we don't want them in charge. >> the tea party folks look like the temper tantrum babies. you ever see the 2-year-old baby in the mall and they're pretty much the parent as opposed to the parent being the parent? my point is the tea party folks seem like they're driving the train, the big voice in the room and mr. boehner has to literally go to them and say let's step back here and look at the big picture, we won this debate, shut up. >> well, he tried that. he tried that. he used foul language, frankly, and it didn't work. how is it going to work on this deal where the best argument they can make is, well, it's a little bit weaker than what we

had before which made it by two votes and they're not going to be a lot of democrats -- >> speaking of two votes, there's two arguments here. first to my original point -- we won this debate, we're talking about tax cuts and talking about substantive tax cuts. number two, this is the first time in american history that we have -- not american history but we have a democratic president that's certainly on the defense and for the most part you have the republicans driving this train and they're not even in charge. so i think mr. boehner probably will do this, he will say, look, we've won this debate, strategically we will go into the fall in a much stronger hand. >> the reason they ended up winning the debate though is because they have religion when it comes to taxes in a way that unifies the party. >> that's right. >> that is not the unifying theme when it comes to shared sacrifice, balanced approach. that is not really unified in the democratic party in the same fervor that it is on the republican side. i think that's why they lost this. >> republicans have been very consistent from the beginning. >> they do in the budge. >> not an inch!

>> not happening. >> with democrats it was entitlements, no entitlements, medicare, balanced process, we're going to get a deal, we're not going to default. in terms what have was the actual bottom line that we would not cross? that has -- both sides know the sooner we get -- the closer we get to tuesday the more pressure on everybody. >> i got to leave it there. will rogers is right, i think. there is no organized political party these days, there is just the democrats. thank you both. the senate is set to hold its test vote on the compromise plan -- at least on harry reid's plans just minutes from now, 1:00 eastern. how will the vote turn out? this is about the legislative clock at this point so this is about trying to speed up the eventual compromise that gets announced probably in the next hour. you're watching live coverage on msnbc. the place for politics. [ male announcer ] get ready for the left lane.

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what could be the resolution of this debt ceiling crisis situation. changing minute by minute. we now know that both mitch mcconnell and speaker boehner have told their conferences, their members, to expect some details fairly soon but it may be for another hour or so. joining me now, doe minmini montenaro. one thing this deal preserves, to be totally cynical, is political talking points for 2012, in particular medicare, entitlements for the democrats and taxes for the republicans. >> no doubt about it. the fact is, there's going to be a lot of talk about winners and losers and no one's going to look good either way here. but if something does get passioned, these guys all retain their talking points. president can talk to independents how he's the most reasonable one, he's the adult in the room. republicans say we have to force

democrats into spending cuts. the tea party could take a pressure of victory from it but probably won't. and the democrats can say, look, these guys wanted to gut medicare. so everyone's going to try to still have their talking points. we're going to hear the same kinds of arguments. no one's going to look great but they retain their talking points. >> richard wolffe, you know the president as well as any reporter in this town. you spent a lot of time with him and have written a couple of books on how he thinks. why is it he cut this deal the way he cut it which frankly, when you look at it, they made the decision. i'm going to need more republicans in the house than democrats to get this through so there probably has to be a pinky on the scale for them. >> okay, so i think the thinking boils down to this. he made his red line about moving beyond six months, getting a debt ceiling increase that takes him through the end of the first term so you don't have to go through this all over again. he got that. but on the principle piece of it i think he's playing a longer

game which is to say the real debate the progressives care about is the bush tax cuts. you have to believe though, if you think that the president is going to allow all the tax cuts to expire, that's their ultimate revenue card, then he's prepared to take the political hit of raising taxes on the middle class and work is folks in america. so that's quite a big "if" there. there's a lot of trust he still think he has with progressives moving into an election maybe because he think everyone's going to get spooked on his side by the choice in an election because this deal right now, the embarrassing piece of it for him is that he.we went out a week a there is no trigger mechanism. the compelling piece is all for republicans to sign on, not for -- democrats to sign on, not for republicans. >> trying to put lipstick on this for some progressive who think it is a pig when he said

deep pentagon cuts, the threat of it, is something that can motivate republicans and frankly we are actually seeing many members of the republican party speak up on that issue. >> well, look. the fact is democrats needed something to say that they got some skin in this or got something out of it so they looked and said, well we'll say pentagon on one side, and democrats are tossing medicare in there. when you look at those two things, nobody really wants those two things to be cut. they're hoping that's going to be a smaharp enough stick to th committee to maybe get things done so they don't have to resort to those two things. on this tax cut, maybe they go to tax code reform or something like that in 2012. >> yeah, um-hmm. in an election year. >> after. >> i'm going to stop the conversation there. i know we'll probably have you back later. thank you, both. as lawmakers try to hammer

out a deal the u.s. economy is what's apparently hanging in the balance. we'll talk about the impact wall street has had on this debate. you're watching msnbc, special coverage of what could be the dead ceiling resolution. we'll be right back. ben and his family live on this block. ben's a re/max agent, and he's a big part of this community. re/max agents know their markets, and they care enough to get to know you, too. nobody sells more real estate than re/max. visit remax.com today. helps defends against occasional constipation, diarrhea,

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well, that's where the action is right now. live pictures of the capitol where the senate is expected to take up a test vote in a few minutes on harry reid's plan to deal with the debt ceiling but of course we know there's another xrom nicompromise in th. cnbc senior analyst and commentator ron insana. this deal, assuming everybody is signing off on it now and we know that's what's going on, everybody's trying to make sure everybody's okay with it, ten they'll come out and announce it, what's that going to mean tomorrow for the stock market, not just here in the united

states but all around the world? >> i think starting tonight you get a relief rally at the very least. think it should prompt some movement upward in the asian markets and in europe, thn certainly here at home. one would assume that you get a relief rally given we were down six days in a row based on some jitteriness over this debt ceiling impasse and the deficit reduction plan. whether in the long run it is enough to satisfy the debt rating agencies and keem them from downgrading the debt is another question but in the short run i think it is very good news particularly if there is a $3 million handle associated with it. >> $3 trillion and there's going to be a lot of political disagreement here between the two parties about how that $3 trillion is being found. how is it as much as we have looked like washington is unable to tackle any challenges, how is it that there would be a downgrade just based on the political process which seems to be what moddy's and s&p were threatening? >> i think the entrench.

we've seen over the last several weeks was disheartening to just about every observer around. if they believe truly the political will was entirely absent to move the ball down the road and actually come up with any legitimate deficit reduction, certainly we'll be put on a negative watch for a ratings down grand and i thinks they'll hold off on downgrading u.s. debt if a $3 trillion deal passes and see what transpires now over the next 12 months. moody's came out and said that if there was some movement in the right way, they'd just put us on negative watch and not down gra downgrade us right away. we've got a lot of economic numbers coming out this week. the market may focus more on those than this agreement. >> i know you're coming back but quickly one thing that motivated the president more than anything was certainty. bill daley, the chief of staff, very much has a lot -- has his ear to the ground of a lot of ceos. they call him, they talk to him.

explain the importance of certainty. >> certainty, well, extraordinarily important. we're already in a period now where people are worried about whether or not this soft patch in the economy is going to linger into the second half of the year or begin to reverse itself. and we have two numbers this week. tomorrow's manufacturing data, friday's unemployment report that are going to be critical. so getting this out of the way, lets us deal with things that are more important, like the economic numbers, like corporate profits, like whether or not main street's digging its way out of this slow patch. that's just as important to the stock market right now if you judge it by the interest rate market which rates have been falling about worries on soft economic growth. then i think the debt ceiling argument as well. >> ron insana, one of my favorite people. i will see you in the next hour as we talk more about what's coming. big jobs report next week friday. nearing the top of the hour where the senate is holding that test vote on harry reid's debt plan. we'll bring you live coverage right here on msnbc to deal with this procedure stuff.

in our next hour we'll talk with a republican senator, member of the leadership there. why are we here? because we're the place for because we're the place for politics. [ male nouncer you've reached the age where you don't back down from a challenge. this is the age of knowing how to make things happen. so, why would you let something like erectile dysfunction get in your way? isn't it time you talked to your doctor about viagra? 20 million men already have. with every age comes responsibility. ask your doctor if your heart is healthy enough for sex. do not take viagra if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. side effects may include headache, flushing, upset stomach, and abnormal vision. to avoid long-term injury, seek immediate medical help for an erection lasting more than four hours. stop taking viagra and call your doctor right away if you experience a sudden decrease or loss in vision or hearing.